Startup offers unlimited, free domestic calls

    A Silicon Valley startup wants to shake up the telecommunications industry with a $399 gizmo that provides free, unlimited domestic phone calls for homes with broadband Internet service.

    Ooma Inc. will also offer a free second line, conference calling, voice mail service and an online “lounge” where users may change their preferences or get voice mail in an e-mail format.

    The company will start selling the devices Thursday with an invitation-only offer to select U.S. residents.

    The company — backed by $27 million in venture capital — eventually hopes to crack the home-based and small-business niches. Engineers are working on a system that forwards calls to cellular phones.

    “It’s nothing like anything a carrier can do currently,” CEO Andrew Frame said. “Once you own the box, you don’t have to pay ooma anything in the future.”


    Frame and other executives assume, of course, that their company won’t meet the same fate as other startups going up against telecommunication veterans.

    Earlier this week, Internet phone carrier SunRocket Inc. abruptly shut down, leaving more than 200,000 customers scrambling for alternate service. The No. 2 standalone Internet phone company after Vonage Holdings Corp. attracted customers with cheap plans and innovative features, but traditional phone and cable companies also lowered prices and started bundling their services.

    Now SunRocket customers are out of luck. Many signed up for prepaid service plans that cost $199 a year — and it’s unclear whether they’ll have any recourse.

    At ooma’s headquarters in Palo Alto, executives say the 43-person company will have a steady revenue stream from hardware sales and international calls. Ooma’s rates start at 1 cent per minute to Europe and 8 cents per minute to India.

    Startup offers unlimited, free domestic calls 1

    [Via MSNBC]